Hiding behind patents, Pharma has become immune to criticism knowing from previous attempts, no one has the ability to force change. Along the way, Pharma has developed a powerful constituency among politicians who often use prepared cliches to equate challenges to high prices as a threat to democracy
“India In the Crosshairs”
History, Discussion and Commentary
by William F. Haddad*
Chairman/CEO of Biogenerics, New York
More people die and suffer each day in the poor and developing nations of the world from the war waged on the availability of affordable medicines than die in classic wars. The “medicines war” – unlike other wars – never ends. Its victims include men, women and children, born and unborn.
Year after year, millions suffer and die needlessly.
There are no street demonstrations, or crowds surrounding the offices of those who are responsible. There are few editorials or news stories systematically reporting this brutal, silent war. There is no chorus of outraged politicians.
And there are no “Scrooges” who are forced by their conscience to see their victims suffer and die. Most of those perpetuating this war are honored by their societies and their secret, the truth, is disguised.
For almost all of these untreated diseases there is a safe, effective, regulated medical clone that is affordable and can be readily available. And, waiting on the sidelines, is a mature and regulated industry to legally clone and manufacture them.
Yet, Third World nations, periodically ravaged by pandemics and crippling illnesses are denied access to essential medicines because, bluntly, access is controlled by the monopolies of multinational pharmaceutical companies (Pharma). If medicines do become available, they are almost uniformly unaffordable. When the AIDS pandemic spread to 36,000,000 persons in Third World nations, only 4,000 persons could afford the life-prolonging treatment of $12,000 a year. No one doubted the others would die.
India provides most of the affordable and essential medicines in Third World nations but that success is again being seriously challenged by a coalition led by the U.S. government and Pharma and pursued in an official public investigation.
Recently, a decision by India’s Supreme Court, after seven years of litigation, denied a patent to a multinational pharmaceutical company because was a virtual copy of an old existing patent and was not “innovative” according to the Indian Patents laws.
In the same time frame, India granted a “compulsory license” to a generic company for another cancer medicine because the brand price was “excessive” and there was no local manufacture.
Many nations reserve these rights when awarding patents.
These legal judgments stunned the international Pharma companies and sent them running to their strongest ally, the United States where a formal investigation is currently underway. Knowledgeable observers expect the usual result: threats of trade penalties for India.
Unlike previous challenges to Pharma’s monopolistic control, it now appears India is determined to defend its rights under international law to manufacture and market essential medicines for its own use and for sale in the poor and developing nations of the world. Political pressures and “visits” by ranking American diplomats failed to “persuade” India to capitulate to Pharma’s demands.
India’s rights are guaranteed by a unanimous vote of the World Trade Organization (WTO). Under the original “Doha Agreement” and “TRIPS” (Trade Related Aspects of International Rights), poor and developing nations lacking medicines in a medical crisis have the absolute right to manufacture or import them, bypassing patents and other restrictions.
Generic companies in India have always responded by providing safe, effective and affordable medicines when the barriers no longer prevent their importation.
But, over time, commercial greed left that right in tatters. Most essential medicines are either unavailable or unaffordable in Third World nations. The result was predictable: people suffered and died.
Suddenly, all that changed.
The AIDS Pandemic
In the late 1990s, when the extent of the AIDS pandemic in Sub-Saharan Africa was recognized, only 4,000 out of over 30 million afflicted could afford treatment although the medicines to keep AIDS victims alive was readily available in Europe and the United States. The reason was not difficult to understand. The three multinational pharmaceutical companies manufacturing the AIDS medicines sold them collectively for $ 12.000 to $ 15,000 per person per year in western nations and turned a deaf ear to urgent pleas to provide the medicines at an affordable price in the third world and developing countries.
A few executives in private meetings had decided who would live and who would die and the combined influence of the world’s non-governmental and humanitarian organizations, churches, courageous politicians and others could not change that decision. Lacking affordable medicines, millions in the Third World died slow and agonizing deaths.
As history will report in years to come, there was one scientist not intimidated by Pharmaâs power and propaganda or by the inevitable surrender of nations unable to obtain affordable AIDS medicines.
Dr. Yusuf Hamied, a scientist and managing Director of an Indian company, Cipla, Ltd. whose generic products were used in the United States and nations around the world, answered his critics by creating a generic AIDS medical clone combining the medicines from three different companies into one tablet taken twice a day, one in the morning and one in the evening, the regime needed to enhance widespread use in the Third World, and reduced the cost to below a dollar-a-day.
For the millions on the highway to death, this “triple” called “Triomune” became the affordable medicine that converted a certain death sentence into a renewal of life.
The generic clone was approved for use in India, followed by approval for wide and extensive use by the World Health Organization (WHO) and then by the U.S. Food and Drug Administration, widely regarded as the worldâs strictest regulatory authority.
Even with these universal approvals in place, Pharma was able to delay its widespread use for three more years. What was being hailed as a major scientific breakthrough was trumped by Pharma’s control of the political process.
I joined Dr. Hamied in the year 2000, as he courageously sought to remove the political wall preventing use of the approved and affordable AIDS medicines.
Pharma quickly learned it was not a fight he would abandon.
For a moment, please, use your “mind’s eye” and join me as I visited hospitals in Africa and elsewhere and share with me a persistent memory of hospital hallways filled with patients lying silently on thin mats waiting to die, a sight made all the worse because in my pocket I had a sample of an affordable medical clone that could restore them to life, a medicine the multinational pharmaceutical companies would not allow physicians to use. There are no words in my vocabulary to describe the lingering pain of watching people die when you knew they could live.
After more than three years of worldwide political struggle, only one hurdle remained blocking use of the generic AIDS medicine, a legal action initiated in a South African court by thirty-eight multinational pharmaceutical companies to prevent the sale of generic medicines in Africa, depriving AIDS victims of their chance to live.
Worldwide, we fanned the flame of a growing awareness that the affordable AIDS clone had the potential for keeping millions of AIDS victims alive. The mounting criticism became intolerable, finally forcing brand companies to abandon their legal action in South Africa.
Within days, Dr. Hamied, joined by two executives from Doctors Without Borders, flew to WHO in Geneva where we urged a “one-stop” worldwide approval process be created to replace the required nation-by-nation procedure then in place. WHO’s approval and departure from tradition could quickly return the dying to life and for many, preserve their families and prevent children from returning to the villages their parents left in search of hope.
Under the determined guidance of a talented, “no nonsense” WHO scientist, Dr. Lembit Rago, the one-stop worldwide regulatory approval…a first…was developed and accepted by recipient nations and shortly thereafter was required for AIDS financing. In months, the system was not only in place but the doors were wide open to keep millions alive.
Only the United States objected and insisted on imposing an additional approval by the Food and Drug Administration for all AIDS medicines financed by their monies although the generic AIDS clone could not be used in the United States, delaying much needed support for three additional years, the time required for Cipla to have its generic products approved without change by the FDA. In the interim only the high priced brands were financed with U.S. funds, an unnecessary tragedy as millions of lives could have been saved in this period by WHO approved drugs available at 1 to 2% of the USA pricing. With an approved FDA product, more than a dozen Indian companies submitted their products insuring continuous availability.
Today more than 8,000,000 people in Third World countries use the generic AIDS clone at a cost of under one hundred dollars a year.
One basic question lingers: who was responsible for allowing poor people to suffer and die in poor countries when affordable medicines were readily available? No Pharma company, no politician, no nation should have the right to decide who lives and who dies in a pandemic.
One practical and commercial solution is on the horizon, “negotiated pricing” between brand and generic companies in Third World markets. If Pharma seriously contemplates a solution, one pragmatic solution is on the table: adopt the original stipulations of the DOHA declaration and allow their patents to be used with payment of a nominal royalty.
For many years, advocates for AIDS treatment in Third World countries turned to the United Nations for help. There, early on, the late Richard Hollbroke, as U.S. Ambassador to the U.N., surprised the world by urging the Security Council, usually the forum for issues of war and peace, to add the human and political consequences of the AIDS pandemic to their agenda. Although his unique intervention won the Council’s support and was praised diplomatically and in the media many years passed until the U.N. finally convened a Conference on how to make AIDS medicines available but also decided generic companies could not attend the meeting.
Efforts to include the generic industry failed. On my last call I was bluntly told “we are looking for a solution” and I was asked, not politely, not to call again.
Their Conference ended with a press conference but without a solution and the unaffordable cost of AIDS medicines was not changed.
Again, in Panama, after I gave a keynote speech to the Health Ministers of Latin American companies, I was pulled aside by the Panamanian Cabinet Minister who had organized the Conference. In a voice that raged from anger to fury, he told me to leave the Conference. Why? Pharma’s observers were angry.
At a later date, Cabinet Ministers from all Latin American companies met to find an affordable solution to their AIDS crisis. Only one Brand Company with a non-AIDS interest remained after the Ministers explained they might authorize joint purchases in an effort to reduce the cost. They eventually decided $250, not $12,000 a year, would be appropriate.
India in the Crosshairs
From the first days of competition in the pharmaceutical industry, India has led the world in providing safe and affordable generic clones of branded medicines not only for the United States but for the poor and developing nations.
Literally, as “the pharmacy of the world” Indian generic companies provide approximately forty percent of the medicines used in the United States and virtually all the affordable medicines sold in the Third World.
Once again, that tradition is facing determined political resistance by the multinational pharmaceutical companies and their legion of Congressional and business allies in the United States. India, literally, is currently in the cross-hairs of a well-financed assault.
As a first-hand witness to this struggle, I believe Pharma wants nothing less than to strangle and annihilate generic competition in the Third World. Pharma argues, falsely but effectively, that lower prices for medicines in the Third World will challenge the high cost of medicines in monopolized western nations and as a result, the industry will not have the financing to find new cures for diseases.
That argument is not only devious, but false, and remains the classic Pharma answer to almost all complaints. The hard, inescapable fact is that higher prices are not “set asides” for discovery or development of new medicines, but to enhance the value of brand-name stocks and to provide generous dividends to its stock holders.
Exploring for the truth of their classic response reveals another story: multinational pharmaceutical companies are historically and currently the most profitable industry in the world although many of their “discoveries” are rooted in Government research. The U.S. National Institutes of Health (NIH) spends about $31 billion a year on biomedical research.
Pharma companies, however, must be credited with converting some of this research into important medicines although their products too often focus on similar clusters of illness. Peter Maybarduk, the program director of Public Citizen’s Global Access to Medicines, in a fascinating unwinding of Pharma’s alibis for monopoly pricing, noted:
“Monopoly pricing, in the case of many diseases, has led to a morally repugnant status quo in which many people die for lack of access to existing medicines. Unfortunately, patent holders frequently believe (rightly or wrongly) that they stand to make the greatest profits selling at very high prices to the few rather than at affordable prices to the many. This is certainly the case for industry pricing of several cancer medicines at issue in India (see below). In developing countries, including India and countries which rely on affordable Indian generics, these pricing practices lead to preventable suffering and death.”
The multinational pharmaceutical companies, worldwide, are not competing in a free market, but one sustained by monopolistic control, political power and intrigue and at the apex of their power is the twenty-year patent that limits competition in developed nations. In the Third World Pharma is currently attempting to enhance its unofficial monopolies with patent protection but to insure control, Pharma must also suppress India’s ability and legal willingness to provide affordable medicines. That campaign is already underway.
India In Pharma’s Crosshairs
As noted earlier Pharma and its allies, including those in the Obama Administration, the U.S. Congress, the National Association of Manufacturers and the US Chamber of Commerce have now joined forces to prevent India from providing affordable medicines for Third World nations.
Until 1995, Indian law permitted generic companies to manufacture clones of branded medicines using procedures that did not violate patents, enabling affordable medicines to be sold both in India and exported to Third World countries.
In that year, with Pharma’s political and financial support, and at the urging of western nations led by the United States, India adopted a Western-style, twenty year patent law that will eventually terminate India’s ability to provide affordable new medicines for the poor and developing nations of the world. The consequences are understood, people will suffer and die because the medicines are unaffordable and potentially affordable clones are banned.
Pharma’s achievement did not evoke outrage in the West or in most of the Third World where it was accepted as inevitable. Supporters hailed the change as “a victory for free enterprise”. Others called it a “death sentence” for competition and affordable medicines.
For decades, as one writer noted, “India was a burr under Pharma’s saddle”. The multinational pharmaceutical companies believed the new law has removed that burr.
Legally, India’s rights are guaranteed by the World Trade Organization.
The World Trade Organization and TRIPS
The right of poor and developing nations to manufacture or import medicines in a crisis is guaranteed by the World Trade Organization (WTO) in its TRIPS Agreement (Trade Related Aspects of Intellectual Property Rights) and by the so-called “Doha Agreement” that unambiguously allows a nation to be released from any restrictions, including patents, in order to meet pharmaceutical needs.
India Urgently Needs Help
Currently, Pharma has once again turned to the United States to prevent India from offering affordable prices for generic medicines in Third World nations. This time their target is India’s Supreme Court.
In late 2013, after seven years of study, India’s highest Court ruled against granting market exclusivity for “Gleevac”, a life-saving cancer medicine manufactured by Novartis. The medicine, the Court ruled, did not deserve a patent because it did not meet the basic requirement for a patent protection, innovation.
That decision brought into the open a classic, often used worldwide Pharma tactic…”trick” is a more accurate word….to extend patent life of a product whose patent is expiring. Their manipulation of the law is called “Evergreening”, the process frequently used to seek additional patent life for a product after its exclusivity ends.
In an attempt to obtain a new seventeen year patent, Pharma companies will add new ingredients to an existing product and apply for a new patent that is more frequently granted than denied. The new product becomes the subject of a massive advertising campaign to physicians and others promoting claims that the “new” product offers unique medical advantages.
The sole reason for the new patent is to maintain market share by blocking generic competition.
In the “Gleevac” decision, the Supreme Court ruled, the added ingredients did not make the medicine “innovative” and therefore not eligible for a new patent.
About the same time, exercising its established legal prerogative, India issued a “compulsory license” (CP) to an Indian company to manufacture and market “Nexavar”, another cancer drug, one controlled by Bayer at a price that was unaffordable in India.
Use of a compulsory license mandate is not exclusive to India. A dozen nations have also awarded similar licenses to compensate for high prices on pharmaceuticals and other products.
In retaliation, Pharma and their allies demanded the U.S. Government and President Barack Obama classify India as a “Priority Foreign Country” the worst sanction possible, one that can result in a ban on the importation of India products into the United States.
The investigation was also requested by two powerful and influential Congressional Committees, Senate Finance, and the House Committee on Ways and Means.
The U.S. International Trade Commission (ITC) was quick to respond and held its first meeting last month and another is planned for next month. The Commission promised to deliver recommendations from its “investigations” to the Congressional Committees by November 30, 2014.
The Commission is expected to rule against India.
The “Thousand Dollar Pill”
The high cost of cancer medications has left a raw nerve among patients and their physicians and the recent introduction of “Sofosbuvir” became the straw that broke the camel’s back.
When taken with existing medicines “Sofosbuvir” has the potential of curing “Hepatitis C” a disease that afflicts 150,000,000 persons worldwide. But who will be able to afford it? “Sofosbuvir” will cost $84,000 for a twelve week treatment or one thousand dollars a pill.
WHO, in a rare statement on the cost of medicine said the new treatment “is unaffordable to most patients in need (and the) challenge now is to insure that everyone who needs these drugs can access them.”
The unanswered question remains “how”? Hiding behind patents, Pharma has become immune to criticism knowing from previous attempts, no one has the ability to force change. Along the way, Pharma has developed a powerful constituency among politicians who often use prepared cliches to equate challenges to high prices as a threat to democracy.
Medically, in Third World countries, the shortage or absence of pediatric and adult cancer medicines calls out for immediate generic intervention. It is a problem generic companies and academic cancer scientists can solve. All the pieces of the puzzle are legally in place.
As a first step along the way, the relevant medical and scientific community should be assembled to create a pragmatic, “first step” formulary of pediatric and adult cancer drugs. The meeting should also include companies interested in manufacturing affordable medicines.
A distinguished “keynote” speaker…and there are several now working with WHO… who could detail how Third World nations are legally entitled under TRIPS to either manufacture or import essential medicines, e.g., pediatric and adult cancer drugs.
With the legal rights explained, a panel of nations already using TRIPS or other rights to manufacture or import essential medicines can detail their practical experience. Brazil, Thailand and half a dozen other nations have already successfully navigated their potential to provide essential medicines.
The obvious forum is the World Health Organization in Geneva.
An updated list of essential cancer medicines should also be maintained by WHO.
Although it is possible, but not likely, WHO itself could urge Third World Nations to exercise their rights.
I am rather confident independent financing for the WHO meeting can be found.
Although I am of that clique that believes too many Conferences are held without accomplishing their stated goals, I believe the lack of available and affordable cancer medicines is pragmatic and do-able
The goal of a continuing flow of affordable medicines is not pointless idealism but with men like Dr. Hamied and Dr. Rago, success can be just around the corner if we are willing to take the time to find it.
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* Haddad Bio
The media refers to Bill Haddad as “the father of the modern generic industry” for initiating and negotiating “Hatch-Waxman”, the Drug Price and Patent Restoration Act that opened the closed door for generic competition in the United States. He led the Generic Industry Association for a dozen years and was CEO of Schein Pharmaceutical. He is currently Chairman/CEO of Biogenerics. He has worked closely with Dr. Hamied of Cipla, Ltd. to lower the cost of AIDS medicines.
Mr. Haddad won a dozen awards as an investigative reporter for the New York Post and the New York Herald Tribune. At the Tribune he exposed the cartel that controlled prices for tetracycline worldwide and Pfizer was eventually fined $200,000,000. At the Post he was a finalist for the Pulitzer Prize for exposing corruption in New York City’s slum clearance program and providing the evidence to send a high ranking public official to prison. At the Herald Tribune he located the secret papers exposing a world cartel controlling uranium prices that led to a Congressional investigation.
He was an assistant to Senator Estes Kefauver and later to Robert Kennedy and served as Inspector General of both the U.S. Peace Corps and the national poverty program.
He was a Member of the New York City Board of Education.